US $120M deal for Sainshand wind farm in Mongolia reaches financial close

Published byENGIE

Monday 28 August 2017

Share

The Sainshand wind farm in Mongolia, the third privately financed wind farm in the country, will receive a USD 120 million project financing package from a group of international investors and financiers.

Located 460 km south-east of Ulaanbaatar in the Gobi Desert, Sainshand Salkhin Park LLC is sponsored by French energy leader ENGIE, German project developer Ferrostaal, Danish Climate Investment Fund (DCIF) and Mongolian entrepreneur, Radnaabazar Davaanyam, with long-term financing provided by the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD).

Once operational, the new Sainshand wind farm will make a significant contribution to reducing Mongolia’s carbon emissions and cater for an expected increase in power demand in the country.

The scheme will significantly enlarge Mongolia’s renewable energy capacity and help the government to achieve the goal of renewable energy accounting for 20 per cent of all power by 2020, and 30 per cent by 2030.

“ENGIE’s ambition is to provide energy access for all through clean and renewable energy sources, especially to developing communities. Mongolia is facing an energy challenge due to increasing demand from industrialisation and urbanisation.

As our first renewable-energy project in Mongolia, ENGIE’s investment in the Sainshand wind farm is consistent with our vision of leading the global energy transition, and the drive for decarbonisation will significantly contribute to powering the country’s energy needs,” said Paul Maguire, CEO of ENGIE Asia-Pacific.

Dr Klaus Lesker, Member of the Executive Board, Ferrostaal GmbH, said: “Achieving the financial close for the Sainshand wind park is an important milestone for Ferrostaal, for the Mongolian government and for the population of Mongolia.

Investing in renewable energy is a significant step in the right direction. Having been present in the Mongolian mining equipment sector for quite some years we are confident that this is a great start for further successful project development in the country’s renewable energy sector.”

The Sainshand wind farm will be built by China Machinery Engineering Corporation (CMEC) as the engineering, procurement and construction (EPC) contractor, and will use 25 Vestas V110 2.2 MW turbines to deliver up to 55 MW of clean energy that will save an estimated 200,000 tonnes of carbon emissions.

Construction at the site is expected to start later this summer and be completed before the end of 2018. It follows three years of wind surveys to measure the high-yield winds in the area. The average wind speeds per second at the site are ideal for onshore wind energy.

The project has been developed in consultation with the local communities and a detailed environmental impact assessment has been approved by the relevant national authority.

Financing has been agreed following preparation of a comprehensive environmental and social management system compliant with international standards such as those of the EBRD, EIB, International Finance Corporation (IFC) and the Equator Principles.